In Bossier City, a debt-fueled spending binge now approaching two decades in length continues to take its toll, depleting significantly reserves derived from the half-cent sales tax paid in the city since 1991 while fire fighters have to make do and city employees keep losing ground to price inflation.
This week, the City Council passed its 2024 budget, which contained a lot of bad news. Compared to the 2023 version, general fund revenues were down over $3 million to $61.7 million, or 4.8 percent. This came mainly as a consequence of sales tax revenues falling over $5.5 million or 15.7 percent to just under $30 million, so even though property tax revenues rose $900,000 or 5.8 percent to $15.5 million, overall revenues took a significant hit. Almost three-quarters of general fund revenues come from these two sources, so more than trivial changes in these have a magnified impact.
Yet spending on public safety increased some $3 million to $42 million despite the reduced revenues. In part, this came from increased state supplemental pay of a few hundred thousand bucks but the rest came from robbing the three funds set up largely to fund capital items for fire operations, the city jail, municipal buildings, and streets and drainage with money derived from the 1991 dedication. Legally the city may use these collections to pay operations and maintenance of fire, jail, and buildings structures and equipment and did so with a vengeance for 2024. Typically, 70 percent of collections is earmarked for this, but for 2024 all of it and $3.4 million from reserves, totaling $6.7 million, will go out the door, reducing collectively the reserves of those funds by a third, to prop up the general fund so that only about half a million fewer dollars are spent.
Another way of looking at this is money that could have gone to capital spending in these areas had to go to operations and maintenance instead, if the city didn’t pay so much in debt. Several other non-enterprise funds, with revenues from various sources, contribute to paying off city debt of about $21 million scheduled for next year.
But they aren’t enough. Because the city carries so much debt – some $214 million for non-enterprise purposes at the end of 2022 that costs about $9 million in interest – the city has to dip into the general fund, with the 2024 budget conforming to the recent average of around $4 million annually, to meet its obligations. That amount could have gone towards things like newer equipment or permanent pay raises for city employees.
The wages of the debt binge became apparent when the Council discussed the two agenda items just prior to budget passage. The first asked for $75,000 for repair and maintenance of fire department vehicles. Responding to questions from Republican Councilor Brian Hammons, Fire Chief Brad Zagone reiterated the need for new ones, noting the overdue state of these. The continued drawdown in the Fire Improvements and Operations Fund impairs the ability of the city to purchase new vehicles, for next year gutted by the entire anticipated $3.8 million in collections instead transferred out to shore up the general fund, leaving $1.3 million.
The second item diverted the last of federal government dollars for Wuhan coronavirus pandemic spending to one-time bonuses for city employees. But without so much need for debt service, permanent raises of twice size of the bonus could have been given – a fact that elected officials may hope escapes the notice of both city employees and the public, cloaked by the upcoming bonus.
And it may get worse before it gets better. Massive expansion of federal government debt to lard out pandemic grants that stimulated artificially the economy – as well as inflation – in large part drove the increase in commerce reflected in sales taxes. With a general fund reserve in the $31 million range the city has about a $21 million cushion on which it could draw to continue its deficit spending, but this ought to be avoided and provides no means by which to hand out raises.
While some Council graybeards will break their arms trying to pat themselves on their backs for what they claim is prudent financial management, the truth is over the past quarter-century a number of dubious capital expenditures authorized by the Bossier City Council squandered a major opportunity to promote economic growth and today hampers the city in trying to spend on genuine needs.
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